Wednesday, July 23, 2014
Individual Credit Score/History Ready to Be Implemented in the Philippines: What it Means and How We Should Prepare Ourselves for it
Credit Information System Act (CISA)- A law passed in 2008 creating CiC
Credit Information Corporation (CiC)-It is under Securities and Exchange Commission (SEC). It aims to collect basic credit data of an individual who may want an access to any loans, mortgage, credit line,etc. from government and private financial institutions. They are currently in touch with SSS, GSIS and PAG-IBIG so that they too will be on board.
BASIC CREDIT DATA: POSITIVE CREDIT INFORMATION or NEGATIVE CREDIT INFORMATION
Below are the basic questions to ask yourself in order to determine if you can/will have a positive or negative credit information:
-- Do you pay your bills ( utilities,phone bills, etc.)early or on time?
-- Do you handle your credit card wisely?
-- Have you defaulted on any loans? Past due?
-- Bounced checks?
-- Cancelled credit cards?
-- Court judgement relating to debts?
Note: Although,CiC keeps credit information for about 3 years,lenders can look back at your credit history as far as they want, but they rely heavily on that 3 years provided by CiC. If the lenders will reject your application for a loan, you have the right to know the reason for the rejection. You are also entitled 1 free credit report every year.
- No need for a collateral to be presented by an individual if he/she wants a loan from any submitting entity e.g banks or any other facility that legally provide loans.
- It is easier for small businesses to seek credit from any submitting entity thus helping small business owners and would-be entrepreneurs especially now that Asean integration is slowly becoming a reality.
- It helps boost our economy allowing consumers an access to credit therefore increases spending. Spending drives our economy upwards, a hard pill to swallow for us who preaches frugality,huh?
- When small businesses and corporation have easier access to loans and such, it speeds up their growth and expansion which helps create jobs.
- When you have positive credit information, you have an access to a good credit loans, speed the loans up and access to an even greater amount. You can also negotiate the terms,rates and interest.
- With proper education and proper dissemination of information about this certain topic by SEC, this could potentially eliminate those loan sharks who preys on low-income Filipinos.
Talks are it could be fully implemented by December this year or early 2015.
WHAT SHOULD REGULAR FILIPINOS DO IN ORDER TO PREPARE FOR THE UPCOMING IMPLEMENTATION:
- Make sure you are paying your utilities on time,and they should be under your name.
-No bills under your name? Post-paid phone plans is the easiest thing you can prepare specially if you don't have SSS number or GSIS number.
Now that a credit bureau is finally created in the Philippines, it could help or hurt us. Help is such a way that it drives our economy upwards,hurt in such a way that crooks will take advantage of our good name and credit identity theft crisis will fall upon us one way or the other. Protect your name. Take precautions when giving or advertising your full name and your birthday in the web.Identity theft is prevalent in America,it could happen in the Philippines,too.
Again, it is not fully implemented and all these information could be obsolete by tomorrow. Keep your ears open. Be informed.
For more information, visit Credit Information Corporation's website.